The new chairman of the Federal Reserve of Australia, Bullock, has stated that if there is a substantial improvement in the inflation outlook, she will not hesitate to further raise interest rates, which is her strongest language so far on the possibility of a resurgence of inflation threats. On Tuesday, Bullock said, "Our focus remains on bringing inflation back to the target level within a reasonable time frame while maintaining employment growth." The board of directors of the Federal Reserve of Australia will meet on November 7th to decide on policy, and the money market expects the possibility of raising the cash interest rate to 4.35% to be slightly less than 40%.
If there is a substantial upward correction in the inflation outlook, the board will not hesitate to further increase cash interest rates. At the same time, the Federal Reserve of Australia has noticed that demand growth and inflation rates have been slowing down, and there is a long-term lag in policy transmission
In his first speech as the governor of the central bank, Block reiterated the policy framework for the operation of the central bank and emphasized some adjustments being made after conducting an independent evaluation of the institution.
Bullock stated that she is working with Australian Finance Minister Jim Chalmers to "modernize and clarify" the Federal Reserve's goals of low and stable inflation and full employment. Previous evaluations have urged the Australian Federal Reserve to "clarify" this task more clearly. However, these changes will not fundamentally change the way we formulate monetary policy. Over time, low inflation and full employment go hand in hand
Some people have called on the Federal Reserve of Australia to set a fixed numerical target for full employment, but Block said this would be "unwise". She said, "Firstly, as the economic structure evolves, full employment may change over time. This is not a concept that can be directly measured. Moreover, it cannot be comprehensively summarized using a single statistical data such as unemployment rate